Schizophrenia is one of the most devastating disorders that often results in a lack of functional recovery. Current treatments focused on remediating symptoms have shown only small successes in a return to functioning despite evidence of a dysregulated stress response. There is a fundamental gap in understanding the impact of allostatic overload in persons with schizophrenia that we theorize is associated with deficits in functioning and with an increased vulnerability and relapse risk. The long-term goal is to test an intervention aimed at improving stress reactivity. The objective in this application is o develop and test the feasibility of a novel therapeutic intervention combining strategies to improve stress reactivity and increase meaningful coping. The central hypothesis is that an intervention that improves stress reactivity as measured proximally by endocrine, immune, and autonomic indices will result in improved adaptive capacity, better role functioning, reduced risk of relapse, and decreased likelihood of disability for people in the early stages of schizophrenia. The rationale for the proposed research is that stress reactivity may be a modifiable risk factor underlying functional deficits in schizophrenia. The intervention integrates two treatment approaches. The first is based on research showing that mindfulness meditation practice is associated with alterations in the neural processing of stressful events and targets adaptive responses to stress. The second focuses on providing a buffer against stress by using the self-generation of adaptive emotions with a positive psychology intervention, which is potentially associated with building protective social resources. These complimentary interventions provide a comprehensive synergistic approach for this population that could lead to more adaptive coping responses and create a buffer against stress. Guided by strong preliminary data and support from the literature, this hypothesis will be tested by pursuing three specific aims: 1) To develop a novel intervention, I- CAT (Integrated Coping Awareness Therapy), aimed at reducing stress reactivity and improving functioning in persons with first episode psychosis (R21-Stage 1); 2) To pilot I-CAT and a range of possible proximal (e.g. autonomic, endocrine, immune indices of stress reactivity, symptom severity) and distal measures (function, relapse, quality of life) with six individuals with first episode psychosis (R21-Stage 2); and 3) To test the feasibiliy of a clinical trial implementing I-CAT for people with first episode psychosis in the context of a small randomized controlled trial with 40 individuals (20 assigned to I-CAT and 20 assigned to supportive therapy (ST) (R33-Stage 3)). The approach is innovative because it represents a departure from the status quo of the current array of treatments and targets functional recovery and relapse prevention through an intervention aimed at improving resilience to stress. The proposed research is significant, because it is expected to produce an intervention to ameliorate impaired stress reactivity that has the potential to change the trajectory of schizophrenia and reduce the likelihood of chronic disability and the associated medical morbidity.